- Beyond Meat (NASDAQ:BYND) and PepsiCo (NASDAQ:PEP) announced the debut of Beyond Meat Jerky as the first product coming out of the Planet Partnership joint venture between the two companies.
- Beyond Meat Jerky is described as an on-the-go snack experience that offers traditional beef jerky in original, hot & spicy or teriyaki flavors. Beyond Meat Jerky contains 10g of protein per serving, no cholesterol and is made with simple, plant-based ingredients like peas and mung beans.
- The Planet Partnership JV is said to combine Beyond Meat's (BYND) leading technology in plant-based protein development and PepsiCo's (PEP) world-class commercial capabilities. The launch of Beyond Meat Jerky signals the first of many plant-based protein innovations from the JV.
- Shares of Beyond Meat (BYND) jumped 3.39% premarket, while PepsiCo (PEP) traded flat.
We do like BYND back at $50. That's where we came in last time as I did the math and the potential is there but it's been very slow to get there – still not profitable (-$180M last year) but 33% sales growth does inspire faith. $52.50 is $3.25Bn and that makes $150M the magic number for earnings so let's assume 10% drops to the bottom line and that means they need $1.5Bn in sales and $600M in 2022 then $800M next year, $1.2Bn in 2024 and 2025 we hit out goal. That's still just a drop in the bucket for the meat industry so I guess this goes back in the Future is Now Portfolio as a full play:
- Sell 10 BYND 2024 $30 puts for $7 ($7,000)
- Buy 25 BYND 2024 $45 calls for $20 ($50,000)
- Sell 25 BYND 2024 $60 calls for $15 ($37,500)
That's net $5,500 on the $37,500 spread so we have $32,000 (581%) of upside potential at $60 – I don't think that's asking too much. Hopefully we can sell some short calls along the way – just 5 (1/5th) of the June $70s at $2.70 are $1,350 using 89 out of 667 days we have to sell but I think we're far too low in the channel to sell short calls just yet.
